Direct Purchase Program

AAA

DEFINITION of 'Direct Purchase Program'

A direct purchase program is a method by which individuals can buy stock in a company directly from that company. The advantage of a direct purchase program is that there is no need to pay any broker fees or commissions. The majority of big corporations offer direct purchase programs as a way of encouraging investment.

INVESTOPEDIA EXPLAINS 'Direct Purchase Program'

Direct purchase programs differ from company to company. These programs are required to comply with complex federal and state securities laws, which can impose various restrictions and eligibility requirements for investors wishing to acquire stock in this manner. This rise of low-cost brokerage services has caused this method of commission-free purchasing to decline in popularity.

RELATED TERMS
  1. Treasury DRIP

    A dividend reinvestment plan that uses dividends to purchase ...
  2. Dividend Reinvestment Plan - DRIP

    A plan offered by a corporation that allows investors to reinvest ...
  3. Dividend Rollover Plan

    An investment strategy in which a dividend-paying stock is purchased ...
  4. Fractional Share

    A share of equity that is less than one full share. Fractional ...
  5. Brokerage Company

    A business whose main responsibility is to be an intermediary ...
  6. Reinvestment

    Using dividends, interest and capital gains earned in an investment ...
Related Articles
  1. Fundamental Analysis

    The Perks Of Dividend Reinvestment Plans

    These plans offer shareholders a way to directly invest in some of the top companies without the commissions.
  2. Markets

    6 Bad Stock Buyback Scenarios

    Buying back shares can be a sensible way for companies to use extra cash. But in many cases, it's just a ploy to boost earnings.
  3. Investing

    A Breakdown Of Stock Buybacks

    Find out what these company programs achieve and what it means for stockholders.
  4. Brokers

    Tips For When To Buy, Sell Or Hold

    Knowing how to make sound snap decisions is a must for any broker.
  5. Investing Basics

    Enterprise Resource Planning System: A How To

    An ERP system won’t transform poor management into good management, but the real-time business analytics can help make good management even better.
  6. Investing Basics

    How To Calculate Goodwill

    Goodwill is an intangible, but it is still possible to effectively calculate or estimate goodwill for a company.
  7. Investing Basics

    Using Appreciative Inquiry To Solve Management Problems

    In its purest form, appreciative inquiry is a powerful tool for shifting the focus of an organization to something much greater than its bottom line - although the eventual outcome will often ...
  8. Investing Basics

    The Basics Of Value Chain Analysis

    Value chain analysis establishes an action plan to understand and implement actvities that create values to a firm's clients, resulting in firm profits.
  9. Investing Basics

    Top Tools for ERP Enterprise Resource Planning

    Top tools used in Enterprise Resource Planning with its characteristics - Explaining the main tools companies use when using Enterprise Resource Planning appraoch
  10. Investing Basics

    Analysis of Companies with high goodwill

    High goodwill as a percentage of market cap can actually be a big red flag--it potentially means the company botched a major acquisition.

You May Also Like

Hot Definitions
  1. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  3. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  4. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  5. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  6. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
Trading Center